Venezuela increases oil exports to China, says Chavez

CARACAS – Venezuela has diversified its oil markets and is selling more than 460,000 barrels per day to China, a 21 percent increase from a year ago, the South American OPEC nation’s oil minister said Monday.

President Hugo Chavez’s leftist government has sought for years to diversify Venezuela’s oil markets away from dependence on its traditional customer and top buyer, the United States.

“Today we are selling more than 460,000 barrels per day to China (and) we are building a refinery jointly with China,” Oil Minister Rafael Ramirez said in an interview on state television VTV.

Chavez’s goal is to raise oil sales to China to 1 million bpd, which appears unlikely without raising Venezuelan output. Ramirez has said Venezuela expects production to remain flat at 3.01 million bpd this year.

In April 2009, Venezuela reported oil sales to China of 380,000 bpd, although Chinese customs data showed China received only 130,000 bpd.

Chinese President Hu Jintao will visit Venezuela this week as part of a tour of Latin America following a nuclear security summit in Washington.

The growing ties between Caracas and Beijing have rattled the United States, which is not used to serious competition for resources in Latin America. Venezuela is one of its top five sources of oil.

Last August, Venezuela agreed to send China almost all its fuel oil output for three years in return for an upfront payment of $8 billion as part of a global Chinese push to ensure future supplies of key natural resources.

Chavez said in February that Venezuela was seeking to increase to $20 billion the investment fund in which China deposits money in return for forward sales of fuel oil.

China, the world second largest oil importer, has also joined efforts to develop Venezuela’s Orinoco heavy oil belt.

In a joint venture with Venezuelan state oil company PDVSA, China will build a 400,000-bpd refinery expected to cost more than $6 billion.

Venezuelan sales to the United States fell to 827,000 bpd in January, one-third less than shipments in the same month a year earlier, according to the US Energy Information Administration. Chavez, a vocal critic of what he calls US imperialism, has said he does not intend to suspend oil supplies to the United States. – Reuters